More AIM Success- but what are the drivers of return?

Male hand with pen on the investment charts

AIM continues to be the market of choice and the envy of growth markets around the world. It has comfortably outperformed London’s main market in all key areas during the Covid-19 crisis so far, one of the worst periods of economic uncertainty and downturn in our economic history. But where has its success derived?

The make-up of AIM has changed since it began back in 1995 when it was considered the wild west of investment markets. Today is a very different picture. AIM now has many businesses valued at over £1billion! Making up a significant share of the market’s overall capitalisation and a key driver of AIM’s overall return.

The two largest companies on AIM are ASOS and Boohoo and well-known online retailers. AIM has many highly profitable companies but at the other end of the spectrum it has some with no revenue or earnings to speak of. However, these are not laggards but some of the most exciting prospects for future growth covering sectors including hydrogen fuel cells and early-stage pharma.

AIM has become more of a rounded market, with many well-established businesses (some over 100 years old). But it is also a marketplace for many innovative and fast-moving business. AIM has a large exposure to some of the economy’s best-performing sectors, such as technology.

Interested in hearing more? Join us on Tuesday 29th June at 2pm for our session Is AIM heading for a fall…or is its outperformance set to continue?

The improving quality of companies on AIM, combined with the Individual Savings Account (ISA) rule changes from August 2013 which allowed AIM shares to be held within ISAs, has seen a growing number of investors consider AIM for both its investment and tax planning attractions. The ability to invest in inheritance tax (IHT) qualifying portfolios through many leading wrap platforms now makes it even easier for clients and advisers.

AIM is no longer the high-risk market of former times, where speculative resource stocks and unknown international companies proliferated. It is now home to a large number of well-managed, profitable, dividend yielding UK based business.

As the market has improved it has also become much easier for investors to buy and sell AIM shares and for advisers to offer access to these exciting companies to their clients, many of which come with attractive inheritance tax planning benefits.

The purchase and sale of AIM quoted securities often used to be the preserve of specialist brokers but AIM IHT Portfolios can now be accessed through leading wrap platforms. This means that, in allocating money to a specialist manager, advisers are not forced to direct money off platform, which can cause unnecessary monitoring and administrative burdens, not to mention a fear of the unknown. Advisers can keep everything in one place maintaining the same pricing structure.

Investing via platforms can also expedite investment without the need to complete lots of paperwork, which is particularly important for AIM for inheritance tax planning purposes with the short, two-year, qualifying period a key attraction.

Fundamental AIM IHT Portfolios can currently be accessed on the Transact, Elevate, SL Wrap, Funds Network, Ascentric and Nucleus platforms.

The Fundamental AIM IHT Portfolio is a discretionary investment management service where clients can obtain 100% mitigation from Inheritance Tax, benefit from the capital growth afforded by the AIM market and retain control of their assets.

To hear the many other ways BPR qualifying assets can help your clients’ Inheritance Tax planning watch our session How can AIM help you and your clients?

You can find out more about Fundamental Asset Management’s high performing AIM IHT ISA and AIM Inheritance Tax portfolio service, which has been delivering exceptional investment returns for more than 17 years, from the link here.

Enjoy your weekend,

The Fundamental Asset Team